Stability amid tech earnings

Equity markets have stabilised a little in the middle of the week, with big tech earnings failing to steer them significantly one way or another.

It’s been a mixed bag from the big tech firms so far and there’s still plenty to come, with Apple and Amazon due to report after the close. Meta is up more than 14% on the day after reporting user growth that pleased investors. This came despite the difficulties it continues to face as a result of iPhone changes and a challenging ad environment.

With the stock off more than 50% from its peak in September prior to the release, the rally has come from a relatively low base. There’s still plenty for investors to be concerned about, not least from rival social media platforms that are strongly attracting the younger audience, but this small reprieve buys Meta time to address that and for ad revenue to pick up.

Twitter reported what could be its final quarterly earnings as a public company earlier, beating expectations on earnings and monetizable daily active users while falling a little short on revenue. The share price was little changed in the aftermath of the report, which is unsurprising given Elon Musk’s proposed takeover. ​

No impending recession in the US

What was surprising was the contraction in the US in the first quarter. That is until it became clear that it was driven by lower inventory building and higher imports versus exports in the quarter. The impact of both of these will be temporary and in the case of inventory, will reverse this quarter. Underlying economic indicators remain strong so despite the headline number, the world’s largest economy is not heading for a recession.

For a look at all of today’s economic events, check out our economic calendar:

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam